Season of sanctions in telecoms

Another season of sanction has hit the telecommunication industry in Nigeria. The recent spate of sanctions imposed by the Nigerian Communications Commission on the big mobile telecommunications operators has caused a stir in the telecom industry. In this report, Bukola Afolabi looks at the reasons, the previous sanctions and what needs to be done to address poor telecom service delivery.

Recently, the Nigerian Communications Commission (NCC) issued fresh sanctions against three of the leading mobile telecommunications operators namely: MTN Nigeria, Airtel Nigeria and Globacom for poor quality of services (QoS) and for not meeting up with the key performance indicators (KPIs).

The performance of mobile operators in meeting the Key Performance Indicators set by the Nigerian Communications Commission will determine their fate, the regulatory agency had earlier said.

The Executive Vice Chairman of the Commission, Dr. Eugene Juwah, and Minister of Communications Technology, Mrs. Omobola Johnson, had threatened that the regulatory agency would impose sanctions on digital mobile operators if poor services persisted till the end of the year.

Johnson had said, “We are concerned that the poor quality issues still abound. I am inundated with complaints about quality of service and the seemingly uncaring attitude of our telecoms operators to resolve these issues on a regular basis. We will continue, through the industry regulator, to apply sanctions when operators fail to meet the required standards in terms of service quality breaches.”

“Consumers cannot continue to bear the burden of poor service delivery. Though we are mindful that the operators are facing issues in deploying or maintaining infrastructure, we believe that the operators can do better in delivering acceptable quality of service, which they are clearly not doing now.”

The Commission sanctioned the three major mobile network operators for various breaches. The sanctions were contained in separate letters dated February 19, 2014, addressed to each of the affected MNOs. NCC asked Globacom, MTN and Airtel to pay N277.5 million, N185 million and N185 million respectively for the month of January.

Before the latest fines, in December 2013, the Dr Eugene Juwah-led NCC issued a ‘Notice of Intention to Sanction’ to all Mobile Network Operators (MNOs) to improve Quality of Service and meet set Key Performance Indicators (KPIs) by December 31, 2013 or face regulatory intervention

Previous warning

Last year during a press briefing in Lagos, Mrs. Omobola Johnson, said: “NCC has announced, and I repeat here, from December 31 any network operator that does not meet previously agreed targets on quality of service, QOS, indicators will be immediately prevented from further expansion of their subscriber base until further notice.

“In other words, they will not be allowed to sell SIM cards to new subscribers until quality of service targets are met.”

Juwah who blamed poor service quality on the operators, said “several factors lead to poor service quality, including environmental factors as currently being peddled by telecoms operators, but as a regulator, I do not think environmental factors are the major causes of poor service quality on our networks.”

According to him, “It is not that the big operators are not investing. They are investing quite well, but the challenge is that as they are investing, they are loading up their networks, such that the investment achieved is lost through over-loading of the networks with additional subscribers and applications. What they should do is to make the capacity of their investments commensurate with the loading up of their networks.”

“This is the reason why NCC decided to impose fines on them. We want to maintain a stable network, because the pride of Nigeria today is that we are the fastest growing telecommunications networks in the world, and we must have to maintain that status through proper regulation,” Juwah insisted.

Past sanctions

This is not the first time the regulator is issuing ‘Notice of Intention to Sanction’ or even applying the sanctions. In fact, this is the third time in less than two years that the NCC is applying sanctions and fining the operators. In May 2012, NCC fined all the four Global System for Mobile Communications (GSM) operators including MTN, Glo, Airtel and Etisalat nearly N1.17 billion for failing to meet up with the minimum standard of quality of service (QoS) for the months of March and April 2012.

Airtel, MTN, Glo, and Etisalat were fined N270 million, N360 million, N180 million and N360 million respectively. The sanctions were communicated to the mobile operators in letters dated May 10, 2012 and states that the four GSM operators failed to keep up with the Key Performance Indicators (KPIs) as specified in Schedule 1 Table 2 of the Quality of Service Regulations 2012.

The sanctions were communicated through letters jointly signed by U. Maska, Head, Compliance Monitoring and Enforcement and Josephine Amuwa, Director, Legal and Regulatory Services on behalf of the Executive Vice Chairman/CEO of NCC, Dr Eugene Juwah.

It said, “The monitoring report indicated that your Company had failed to meet the minimum standard of quality of service including the key performance Indicators (KPI’s) as specified in Schedule 1 Table 2 of the Quality of Service Regulations 2012.”

Airtel was fined a total of N270 million, N15 million and N2.5 million was for each parameter for a service contravened throughout the months of March and April respectively. NCC had directed Airtel to pay to the Commission on or before May 25, 2012, N270 million or attract further N2.5 million per day as long as the contravention persists.

Glo was fined a total sum of N180 million. N15 million and N2.5 million was for each parameter for a service contravened throughout the months of March and April 2012 respectively and was expected to pay up N180 million on or before May 25, 2012 or risk additional N2.5 million fine per day as long as the contravention persists.

Etisalat and MTN were fined a total of N360 million each. N15 million and N2.5 million was for each parameter for service contravened throughout the months of March and April respectively. NCC directed Etisalat and MTN to pay to the Commission on or before May 21 and May 25, 2012 respectively N360 million each or attract further N2.5 million per day as long as the contravention persists.

It was like a showdown between the NCC and the operators, but after several weeks of trading blames, the NCC decided to lower the standard of its Key Performance Indicators (KPIs), with which it uses to measure network performances. Based on that decision on KPI, the operators reluctantly paid the fine, several weeks after the fine was imposed. No details were, however, given that the operators paid the daily penalty.

A breakdown of the combined N1.17 billion fine showed that MTN Nigeria Communications and Etisalat, paid the sum of N360 million, each while Airtel paid the sum of N270 million. Globacom paid the sum of N180 million.

NCC, however, advised the operators to take advantage of the lowered standards in its KPIs, to maintain stable network quality, and warned operators to either maintain better service quality on their networks before December 2013, or face another round of sanction.

Reasons for poor telecom service

Chief executive officer, Airtel Nigeria, Mr Segun Ogunsanya, laid the blame for recent poor telecom services on Nigeria’s patchy power infrastructure which has long been an obstacle for the country’s telecom operators.

“In a country with about 25,000 Base Transceiver Stations (BTS) and a need for around twice that number over the next 10 years, the power infrastructure challenge is especially nagging.

“The power costs of a site connected to the power grid are only about 1/6th those of a fuel-powered site, but only about 10 per cent to 15 per cent of BTS are connected to the electric power grid. The implications of such absence of reliable power infrastructure are far-reaching. Nigerian operators spend around N8 billion to N10 billion a year in diesel costs to power up their base stations.”

He said further “Such costs account for about 60 percent of operators’ network costs. Primarily because of such fuel costs, average network costs in Nigeria are twice to thrice higher than in a number of other African markets. The multiple taxations of telecoms operators represent another challenge facing the industry. It was once merely a side effect of Nigeria’s federal structure and the inherent risk of overlapping.”

Ogunsanya noted that there are other issues bordering on multiple regulations, frequent fibre-cut, community issues and other problems that are making it difficult for the common man to experience the desired quality of service.

“Recently too, we saw cases of flooding and activities of terrorist groups that adversely hampered quality of service”, he said.

Subscribers’ want compensations

On his part, President, National Association of Telecommunications Subscribers, Deolu Ogunbanjo, the hard fines that the NCC had adopted is only putting money in the pocket of the government and is leaving the Nigerian subscribers with nothing as even these fines will still be paid indirectly by the subscribers.

According to him, NATCOMS is advocating a soft fine such that will be of benefit to consumers, which can be achieved by asking the operators to give N10,000 worth of airtime to each subscriber on their network. This way, the subscriber gets the benefit of the fine.

Subscribers that spoke with The Nation were equally worried just like the regulator and the operators, that the issue of poor service quality still lingered, in spite of efforts made by government, regulators, and the operators to address it.

Mr. Johnson Dubem, a subscriber to MTN and Globacom said subscribers suffered a lot of challenges in telecoms services delivered in 2013.

According to him, subscribers ought to be treated nicely with the best service quality, because we spend our hard earned monies on recharge cards, yet service delivery is still poor.

Another subscriber, Mr Kalu Igwe said that the situation got worse during the last Yuletide season. “During Christmas celebrations, more people make calls and send text messages to their loved ones. Operators should know that they should expand their networks to accommodate increased volume of calls and text messages” this season, but they will not do so, he said.

According to him, “Every year we experience traffic jam on the networks and this year is not an exception. The operators have to address the situation now,”.

FG’s efforts

Worried by the slow pace of telecoms infrastructure rollout in the country, occasioned by high cost of Right of Ways (RoW) imposed by state governments, and the diverse levies imposed by government agencies, which is believed to be a major cause of poor service quality across networks, the Minister of Communications Technology, Mrs. Omobola Johnson recently held a meeting with the Lagos State government at the Government House in Lagos, and telecoms operators were in attendance. At that meeting, the Lagos State government agreed to reduce telecoms charges in the state in order to allow for speedy rollout of telecoms infrastructure in the state.

ALTON, ATCON hit back

Some stakeholders in the industry condemned the NCC for imposing a fine of N647.5 million on Airtel, Globacom and MTN Nigeria, while lamenting that the regulator is only dancing round in circles.

They believe nothing good should be expected from the latest move, as it is not likely to achieve anything with these punitive measures just like its efforts were fruitless in 2012 when it imposed sanctions on all the operators.

The chairman, Association of Licensed Telecommunication Operators of Nigeria, Gbenga Adebayo, an engineer, said by this action, the NCC was only shying away from its responsibilities.

The latest fine, he recalled, is the third time the NCC was imposing sanctions on operators and wondered if it had changed anything.

Also, he wondered whether it has any benefit on subscriber whom the regulator claims to be doing all these on their behalf, stressing that all the fines will go into the treasury of the Federal Government.

He accused the NCC of acting as a sole administrator, not caring about the general good of the industry, while playing to the gallery and highlighting only the negative things in the industry.

The President Association of Telecommunications Companies of Nigeria (ATCON) ,Engr. Lanre Ajayi, said the action by the NCC was not only wrong, but unjustifiable.

According to him, it was very difficult to picture how sanctions can improve quality of service.

“It does not add on. We all know why there is poor quality of service. It is because of challenges and inhibitions on the way of operators so rather than impose sanctions, government should find ways to remove these impediments,” he said.

The ATCON boss maintained that the NCC imposed sanctions in 2012 and it did not yield any positive response and doubted if anything will change this time around.

NCC and constant resort to fines

Reuben Mouka, Head, Media and Publicity, NCC, said: “As part of NCC’s routine regulatory activities, it has collated statistics from the network operating centres of the operators in the month of January and discovered that the services provided by MTN, Airtel and Globacom fell short of the KPIs published in 2013. However, Etisalat was given a clean bill, having met all the established KPIs.”

According to him, some of the critical KPIs against which their services were evaluated include Call Setup Success Rate (CSSR), Drop Call Rate (DCR), Traffic Channel Congestion TCHCONG, and Stand Alone Dedicated Channel Congestion (SDCONG).

Several of the stakeholders and operators said the frequent resort to fines to address the quality of services issues in the telecommunications sector has not helped matters. They argue that since the regulator started issuing fines, it has not addressed the real causes of the poor quality of services.

Vandalisation of telecom equipment

Telecom operators have lamented the heightened insecurity in some parts of the country which has limited their ability to carry out routine maintenance and emergency repairs. They have also deplored the continuous vandalism of telecom infrastructures as well as destruction of fibre cables by road construction companies causing the quality of service to drop.

According to Akinwale Goodluck, MTN’s Corporate Services Executive, the company remained committed to ensuring the best quality of service for its teeming customers. He said, “MTN continues to employ the greatest effort to overcome the infrastructural and environmental challenges that impede the delivery of consistently good quality of service.”

Emeka Oparah, Director, Corporate Communication and CSR, Airtel Nigeria said “We are still trying to come to terms with the fines, first as Airtel and second as a member of the telecom industry.”

Meeting with CPC after the sanction

The Consumer Protection Council (CPC) recently summoned the chief executive officers of telecommunications companies operating in the country over complaints of poor services by consumers.

Speaking with journalists after the meeting, the Director-General, CPC, Mrs. Dupe Atoki, said ways of addressing various consumer complaints arising from poor network and unsolicited services were discussed.

She said, “I called the meeting of all the CEOs of the telecommunications operators in Nigeria to discuss issues that all Nigerian subscribers are aware of. The main issues that are of concern to Nigerian consumers are drop calls, truncated services, poor network services, unsolicited services, unlawful deductions/wrong billings, exploitative automated services and poor customer services. I commend the operators that attended. Some of them did not attend.

“However, I am glad to report that we had a fruitful deliberation. The telecoms operators have recognised that these are valid concerns. But the stand of the CPC is that consumers must get value for the money they pay for telecommunications services.”

At press time, The Nation learnt, that the affected telecos previously fined by the NCC had not only paid off the fines but restated their commitment to improve service delivery.